GDP is known as the acronym for “Gross Domestic Product” is the monetary value of all goods and services produced in a given region, during a given period, usually one year. As a popular slang, GDP is one of the most used indicators in the macroeconomy since its main objective is to measure economic activity, taking into account only the goods and services produced within the formal economy of a given territory regardless of the origin of the companies, excluding everything that occurs in the context of the informal economy, or illegal business.
To analyze the behavior of a country’s GDP, it is necessary to differentiate nominal GDP, real GDP and GDP per capita.
- Nominal GDP is characterized by value or current market prices of goods and services produced in a given time. When it is indicated that current prices are taken into account, they are those that are established in the goods and services at the time of determining the GDP, which are often affected by inflation or deflation, and in this context experts suggest taking Real GDP counts.
- Real GDP is calculated by the constant price of final goods and services produced in a country. Constant prices are calculated from a base – year that allows eliminating changes that arise in prices as a result of inflation or deflation.
- GDP per capita is the division of GDP by the number of inhabitants of a country. The respective indicator as a measure of social welfare or quality of life of the inhabitants that make up a country is strongly criticized because it ignores the economic inequalities that exist between the inhabitants since it attributes the same level of income to all.
GDP is calculated as flow of expenses or income flow. In the first case, the following indicators are taken into account:
- The consumption of goods and services acquired by family and businesses.
- Investment especially by companies.
- Public expenditure acquired by the Public Administration, in this context the salaries of public officials are also included.
- The result of exports – imports.
However, as income distribution, it is taken into account: salaries, rents, taxes (VAT, income received by the State), benefits received by the owners of the company, and depreciation.
In relation to the results that may arise in the calculation of GDP, if the GDP of a country increases indicates an increase in the production of a country, as well as an increase in economic investment. Also, a GDP growth represents income for the government through taxes, therefore, the role of the State in the economic strengthening of a country and providing security and conditions for the investment of new businesses and growth is of utmost importance. of the existing ones.
GDP and GNP
The GDP includes the income generated by foreign citizens who work in the country, but not the nationals of the country who work abroad as it will be calculated in the GDP of the other country. For its part, the GNP is the income generated by the citizens of one country, and by the citizens of the same country that is in another, and excludes foreigners who live in the country.
- What is Adenoid Cystic Carcinoma? - The doctor speaks of a malignant tumor when he starts out with an adenoid-cystic carcinoma . Although the tumor is relatively rare, it is fatal in many cases. Mainly because the adenoid-cystic carcinoma spreads so that other organs can also...
- What is Acne Inversa? - Most people are familiar with acne as a skin disease which leads to more or less severe visual impairments to the structure of the hood. For this reason, many young people of puberty in particular fear developing what is known...
- What is APC Resistance? - The term APC resistance or factor V Leiden mutation describes a mostly genetic blood clotting disorder (thrombophilia) that is responsible for the formation of venous thromboses. This genetic defect is passed on from parents to boys and girls alike. In...
- What is a plug-in? - So-called plug-ins are often used in IT programs. This article explains exactly what this term means and in what form plug-in modules are successfully used in software application development and deployment. A plug-in (also plug-in or add-in or add-in from...
- What is Spring Boot? - What is Spring Boot? The open source framework Spring reduces the complexity of Java programming. According to the motto “convention before configuration”, the Spring Boot tool aims to further simplify the development of enterprise applications in Java. In 2003, Spring,...
- What is Supply and Demand? - Abbreviated as SND by AbbreviationFinder.org, supply and demand are the two forces that guarantee the functioning of a market, determining prices and the quantity of products offered. The term offer refers to the quantity available of a product, that is,...
- What is Beginner’s All-Purpose Symbolic Instruction Code? - Beginner’s All-Purpose Symbolic Instruction Code is abbreviated by AbbreviationFinder.org as BASIC which is known for having very good functions for manipulating character strings. Early dialects already had a set of fundamental functions (LEFT $, MID $, RIGHT $) to extract...
- What is NBA? - NBA (which stands for National Association of Basketball according to AbbreviationFinder.org) is an American league basketball professional, which was founded the 6 of June of 1946 in the city of New York under the name Basketball Association of America in the...
- What is ESPN? - Short for Entertainment and Sports Programming Network by AbbreviationFinder.org, ESPN is a company of television transmission by satellite, cable, distribution of information via web among other means founded in 1979 by Scott and Bill Rasmussen that is mainly dedicated to...
- What is ICC? - ICC: International Criminal Court International Criminal Court, known as acronym ICC on AbbreviationFinder.org, English International Criminal Court [ ɪ ntə næ ʃ nl kr ɪ m ɪ nl k ɔ ː t], acronym ICC [a ɪ si ː si ː...